DO I need 20% down to buy a home?

As a potential homebuyer, you may be wondering if you need to put down 20% of the purchase price as a down payment. The answer is no - it's a common misconception that a 20% down payment is required to buy a home.

While a 20% down payment can help you avoid private mortgage insurance (PMI), there are a variety of mortgage options available that require less than 20% down. In fact, the average down payment for first-time homebuyers in 2020 was just 6%.

So, what are your options if you don't have a 20% down payment? Here are a few:

- FHA loans: These loans are backed by the Federal Housing Administration and require as little as 3.5% down. However, you will have to pay mortgage insurance for the life of the loan.

- VA loans: If you are a veteran or active-duty service member, you may be eligible for a VA loan, which requires no down payment.

- Conventional loans: These loans are not backed by the government and typically require a down payment of 5% or more. However, you may be able to put down as little as 3% with certain programs.

It's important to note that a lower down payment may mean a higher monthly mortgage payment and more interest paid over the life of the loan. However, it can also help you get into a home sooner and free up cash for other expenses like home improvements or savings.

In terms of the current market, it's a great time to buy. Interest rates are still historically low, and there are plenty of homes available for sale. However, competition is fierce, so it's important to work with a real estate agent who can help you navigate the market and find the right home for you.

Ultimately, the amount you put down on a home will depend on your financial situation and goals. But remember, a 20% down payment is not a requirement to buy a home - there are plenty of options available for buyers with smaller down payments.